Incentives for First-Time Homebuyers

Tim Lyon • June 11, 2025

There are a lot of programs and incentives for first-time homebuyers, but it can be hard to keep track of them all.

Each one has its own rules, limits, and fine print—which makes it easy to feel confused or overlook something valuable.


In this post, I’ll break everything down clearly so you understand exactly what’s available and make sure you’re not missing out on any savings.


What Counts as a First-Time Homebuyer?

Before getting into the incentives, it helps to know what “first-time homebuyer” means for most of these programs:

  • You (or your spouse/common-law partner) haven’t owned a home that was your principal residence in the current year or in the 4 previous calendar years.
  • You plan to live in the home as your principal residence.

(Provincial/local programs may have additional or slightly different requirements.)


Federal Incentives for First-Time Homebuyers

1. First Home Savings Account (FHSA)

A registered account that combines the best of an RRSP and TFSA: contributions are tax-deductible, and withdrawals for your first home (including investment growth) are tax-free.

  • Annual limit: $8,000
  • Lifetime limit: $40,000
  • Unused annual room carries forward, so if you don’t contribute the full $8,000 in one year, you can catch up later.
  • Funds must be used within 15 years of opening the account or before age 71.


Important Note: Can be stacked with the Home Buyers’ Plan (HBP).


2. Home Buyers’ Plan (HBP)

Withdraw up to $60,000 from your RRSP to buy or build a qualifying home.

  • Repayment: spread over 15 years, starting the second year after withdrawal.
  • Contributions don’t affect your regular RRSP deduction limit if designated as HBP repayments.


3. GST/HST New Housing Rebate (First-Time Buyers GST Rebate – New in 2025)

For new or substantially renovated homes, first-time buyers may be eligible for a full or partial rebate on GST or the federal portion of HST.

  • Full rebate: Homes valued up to $1 million
  • Partial rebate: Homes between $1 million–$1.5 million (phased out linearly)
  • No rebate: Homes above $1.5 million
  • Potential savings: up to $50,000


Important Note: The federal government has announced this program, but as of now, we don’t yet have final details on how it will work in practice. More guidance is expected.


4. 30-Year Amortization for First-Time Buyers of Insured Mortgages

As of 2025, all first-time buyers with insured mortgages (less than 20% down) may qualify for a 30-year amortization.

  • Benefit: Lower monthly payments allowing for better cashflow or more purchasing power
  • Trade-off: More total interest paid over time


5. Home Buyers’ Amount (First-Time Home Buyers’ Tax Credit)

A non-refundable federal tax credit to help with closing costs such as legal fees, inspections, and appraisals.

  • Maximum claim: $10,000
  • Value: up to $1,500 back at tax time.


Provincial Incentive – British Columbia

First-Time Home Buyers’ Program (Property Transfer Tax Exemption)

In BC, first-time homebuyers may qualify for a full or partial exemption from the Property Transfer Tax (PTT).

  • What is PTT?
  • 1% on the first $200,000 of fair market value (FMV)
  • 2% on FMV between $200,000–$2,000,000
  • 3% on FMV above $2,000,000
  • Exemptions:
  • Full exemption if FMV is $500,000 or less
  • Partial exemption between $500,000–$835,000
  • No exemption if FMV is $860,000 or more
  • Eligibility Criteria:
  • Canadian citizen or permanent resident
  • Filed at least 2 income tax returns as a BC resident in the last 6 years
  • Never previously owned a principal residence anywhere in the world
  • Must move in and make the property your principal residence

This program alone can save buyers up to $8,000 on closing costs.


Real-World Example

Let’s say you’re buying a $800,000 home in BC:

  • You use your FHSA savings, withdrawn tax-free.
  • You withdraw $40,000 from your RRSP under the Home Buyers’ Plan.
  • You save $8,000 on BC’s property transfer tax (since the home is above $500,000 but below $860,000).
  • You also claim the Home Buyers’ Tax Credit = $1,500.


Total savings: Tens of thousands between rebates, exemptions, and tax advantages—bringing homeownership closer within reach.


Potential Savings – At a Glance

Quick Summary

  • FHSA: Save up to $40,000, tax-deductible in, tax-free out
  • HBP: Withdraw up to $60,000 from RRSP, repay over 15 years
  • Home Buyers’ Tax Credit: Up to $1,500 tax reduction
  • GST Rebate: Up to $50,000 on new builds under $1.5M (pending details)
  • 30-Year Amortization: Lower monthly payments on insured mortgages for all FTHBs
  • BC PTT Exemption: Up to $8,000 in tax savings


Next Steps

  1. Check eligibility: Federal vs BC programs differ slightly.
  2. Plan savings early: Use FHSA + RRSP contributions strategically.
  3. Run the numbers: GST rebate and PTT thresholds can make or break affordability.
  4. Talk with a mortgage broker: Ensure you’re combining incentives properly and not leaving money on the table.


Need help navigating these programs? Book a consultation or call 778-988-8409.


Mortgage Term Glossary

Amortization: The total length of time to fully repay your mortgage (typically 25–30 years).

Down Payment: The upfront amount you pay toward the purchase price of a home, typically expressed as a percentage of the total price.

Equity: The difference between your home’s value and your outstanding mortgage balance.

FHSA (First Home Savings Account): A registered plan that allows tax-deductible contributions and tax-free withdrawals for your first home.

GST Rebate: A federal rebate for first-time buyers of new or substantially renovated homes, providing up to $50,000 back (pending government guidance).

HBP (Home Buyers’ Plan): A program allowing you to withdraw up to $60,000 from your RRSP for a down payment, repayable over 15 years.

Mortgage Term: The contract period for your mortgage rate and conditions (usually 1–5 years).

PTT (Property Transfer Tax): A provincial tax charged in BC when registering your home’s title; exemptions are available for first-time buyers.

RRSP (Registered Retirement Savings Plan): A registered savings plan where contributions are tax-deductible and investment growth is tax-deferred.

Tim Lyon

Mortgage Consultant

25 Year vs 30 Year Amortization: A Practical Guide

By Tim Lyon • January 25, 2026
Trying to choose between a 25 and 30 year mortgage amortization? Learn how each affects your payments, interest, and flexibility so you can decide with confidence.

How Rental Income Impacts Your Mortgage Approval (And Why Lender Choice Matters)

By Tim Lyon • January 20, 2026
If you are buying a home with a suite, keeping your current home as a rental, or already own a rental property, mortgage qualification can get confusing fast. The frustrating part is that you can do everything “right” and still get very different answers depending on which lender you talk to. Here’s a simple breakdown so you understand it and don’t miss out. What are Debt Service Ratios? In Canada, lenders qualify you using two main ratios: Gross Debt Service (GDS) This looks at housing costs only , typically: Mortgage payment Property taxes Heating 50% of strata fees (if applicable) GDS typically needs to be 39% or less of your gross income. Total Debt Service (TDS) This includes everything in GDS , plus other debts like: Car loans Credit cards Lines of credit Student loans TDS typically needs to be 44% or less of your gross income. These ratios are the foundation. If they do not work, the lender will not approve the mortgage, even with strong credit and a solid down payment. How Lenders Treat Rental Income Most people assume lenders look at rental properties based on simple cash flow (rent minus mortgage payment). In reality, most lenders use one of two methods: 1) Addback A percentage of the rental income is added to your gross income for qualification purposes. 2)Offset A percentage of the rental income is subtracted from the mortgage payment tied to the rental property. Different lenders use different percentages and different worksheets. That is why the same borrower can qualify with one lender and fail with another. Benefits of Understanding Lender Methods When you understand how rental income is calculated, you can: Avoid being under-qualified by a lender with conservative rules Get a more accurate picture of your real purchasing power Choose a lender that fits your situation (instead of forcing your situation to fit the lender) Important Considerations A few key points to keep in mind: Rental income is rarely counted at 100% , but some lenders are more generous than others. The method matters just as much as the percentage (addback vs offset). If you own multiple properties, lender worksheets can change the result dramatically. Your lender choice is a strategy decision , not just a rate decision. Real-World Example: Same Clients, Two Very Different Outcomes Here’s an example comparing lenders Scotiabank and Strive, using a fictitious couple: Scenario Household income: $160,000 Existing townhome: $800,000 value with a $525,000 mortgage ( $2,500/month payment) Market rent for the townhome: $3,400/month New purchase: property with a rental suite generating $1,800/month Down payment: 10% Other debts: student loan $165/month , car loan $500/month How Scotiabank viewed it For the townhome rental, they counted half the rent and subtracted the mortgage payment, leaving an $800/month shortfall that gets added into the debt ratios. For the new purchase, 50% of the suite income gets added to income. Max mortgage : $650,700 Max purchase price : $723,000 How Strive viewed it For the townhome rental, Strive used a rental worksheet and calculated $5.20/month of income that can be added to the application. For the new purchase, 100% of the suite income gets added to income, and they did not need to include taxes or heat. Max mortgage : $878,400 Max purchase price : $976,000 The result That’s a $253,000 difference in purchasing power , with the same clients, same income, same debts, and same properties. The difference was lender policy. Quick Summary GDS and TDS ratios are the backbone of mortgage qualification. Rental income is usually counted using Addback or Offset , and each lender handles this differently. Two lenders can produce wildly different results, even with the exact same file. In the example above, lender choice created a $253,000 swing in purchasing power. Next Steps If you are planning to: Buy a home with a suite Keep your current home and convert it to a rental Use rental income to qualify Reach out and I will run the numbers across multiple lenders so you see what you actually qualify for, not just what one lender will allow. Need help with your mortgage? Book a consultation or call 778-988-8409 . Glossary Addback : A method where a lender adds a percentage of rental income to your gross income for qualification. Gross Debt Service (GDS) : The ratio that measures housing costs as a percentage of gross income. Offset : A method where a lender subtracts a percentage of rental income from the rental property’s mortgage payment for qualification. Total Debt Service (TDS) : The ratio that measures housing costs plus other debts as a percentage of gross income.